Sarah Bradford highlights some of the potential traps in applying the trivial benefits exemption and explains how to avoid them.
The trivial benefits exemption is (in theory) designed to save work; employers do not need to report low cost benefits that fall within the scope of the exemption, meaning that HMRC does not need to deal with them. As an added benefit, employees are able to enjoy the benefits free of tax, and employers do not have any associated Class 1A National Insurance contributions to pay.
However, for something which, by definition, is trivial HMRC is seemingly devoting considerable energy dreaming up scenarios in which the exemption will not apply.
Employers could be forgiven for thinking that as long as a benefit costs less than £50, they can simply ignore it. However,
